A palladium-catalyzed iodine atom transfer cycloisomerization of (Z)-1-iodo-1,6-diene has been developed, which provides a facile method to construct six-memebered heterocycles bearing an alkyl iodide group. The ligand screening shows that both the type and the quantity of ligand impose significant influences on this transformation, and the combination of 30 mol % 1,1'-bis(diphenylphosphino)ferrocene (DPPF) and 10 mol % Pd(OAc)(2) is the optimal choice. The catalytic cycle, consisting of oxidative addition of Pd(0) to vinyl iodide, intramolecular alkene insertion, and alkyl iodide reductive elimination, has been proposed and eventually supported by convincing evidence from a series of control experiments. More importantly, these control experiments disclose some features of the event of alkyl iodide reductive elimination: (1) this reductive elimination is proved to be a stereospecific process; and (2) both alkyl iodide oxidative addition and reductive elimination are not effected by a TEMPO additive. Besides its ability to undergo oxidative addition, the catalyst (palladium + DPPF) could also promote a radical transfer process. The findings described in this paper will be helpful for further development of the metal-catalyzed formation of a carbon-halide bond.